JM Financial has identified National Aluminium Company Limited (NALCO) as one of its top investment picks for Diwali in the Samvat 2081 year, citing the company’s robust growth prospects. NALCO is poised for success due to its ongoing expansion of the alumina refinery, increasing alumina prices, and cost savings from captive coal mining. Currently, NALCO’s shares are trading below ₹250 and have seen a nearly 67% increase year-over-year.
As of October 31, 2024, NALCO shares closed at ₹227.10 on the BSE, remaining stable with a market capitalization of ₹41,709.91 crore. The stock is close to its 52-week high of ₹235.40 and has surged over 154% from its 52-week low of ₹89.38. The price-to-earnings (P/E) ratio is at 18.04, while the return on equity (ROE) is approximately 15.86%.
JM Financial highlights that the Indian government holds a 51.3% stake in NALCO, positioning it as one of the largest producers of bauxite, alumina, and aluminum in the country. In FY24, NALCO produced 0.46 million tonnes (mt) of aluminum and 2.12 mt of alumina, with alumina export sales reaching 1.17 mt.
The brokerage has set a price target of ₹264 for NALCO shares, suggesting a potential upside of 17% over the next 6 to 12 months. Furthermore, JM Financial underscores NALCO’s strong history of dividend payments, having issued a total of 48 dividends since August 2000. In the past year, the company has provided a ₹5 dividend per share, resulting in a dividend yield of 2.2%. NALCO also has a record of stock splits and bonus issues, including a 1:2 stock split and a 1:1 bonus issue that occurred in March 2011.
Founded on January 7, 1981, and based in Bhubaneswar, NALCO operates captive bauxite mines in Odisha, which supply its alumina refinery in Damanjodi and its aluminium smelter and captive power plant in Angul.
Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions. Past performance is not indicative of future results.
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